A Saudi prince has warned that his oil-reliant nation is under threat because of fracking technology being developed elsewhere around the world.

Billionaire Prince Alwaleed bin Talal said the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues.

His warning comes as rising shale energy supplies in the United States cut global demand for Saudi oil.

In an open letter to his country's oil minister Ali al Naimi and other government heads, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from Organisation of the Petroleum Exporting Countries (Opec) member states was "in continuous decline".

Image:State-owned Saudi Aramco was hit by a huge cyberattack last year

He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many".

He added that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology.

It is allowing the US and Canada to tap unconventional oil deposits which they could not reach just a few years ago.

Image:Small towns, like Carroll County in Ohio, have been boosted by fracking

Chancellor George Osborne has also announced support for fracking in Britain and in offshore waters, to ease a reliance on foreign oil and gas.

Some analysts think this may push demand for Saudi oil, as well as global oil prices, down sharply over the next decade.

Over the past couple of years the Saudi government has taken some initial steps to develop the economy beyond oil.

It has sought to liberalise the aviation sector and provided finance to small, entrepreneurial firms in the services and technology sectors.

Image:Cuadrilla has been exploring for gas in Britain, despite public protests

Mr Naimi said publicly in May that he was not concerned about rising US shale oil supplies.

Prince Alwaleed told Mr Naimi in his open letter, which was dated May 13 this year, that he disagreed with him.

The prince said: "Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil.

"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately."

The prince said Saudi Arabia should move ahead with plans for nuclear and solar energy production to cut local consumption of oil.

The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day (mbpd), Prince Alwaleed argued.

Image:George Osborne reveals tax breaks to spur fracking investment

Current capacity is about 12.5mbpd; a few years ago the country planned to increase capacity to 15mbpd, but then put the plan on hold after the global financial crisis.

While most Saudi officials have in public insisted they are not worried by the shale threat, Opec has recognised that it needs to address the issue.

In a report earlier this month, Opec forecast demand for its oil in 2014 would average 29.61mbpd, down 250,000bpd from 2013. It cited rising non-Opec supply, especially from the US.

Image:Riyadh has announced a metro system to ease car usage

:: The fracking warning comes as Saudi Arabia announced three foreign consortiums - led by US, Spanish and Italian firms - have won a $22.5bn contract to build Riyadh's 110-mile, six-line metro train network.